Raising The Minimum Wage Increase On Employment And Family Income Essay

Decent Essays
Raising the minimum wage
America’s economy is built upon the free enterprise system which operates according to five principles: the freedom to choose our businesses, right to private property, profit motive, competition, and consumer freedom. This system allows pricing of goods and services and employee wages to be determined by the market. Raising the minimum wage will adversely affect the pricing of consumer goods and employee wages and can temporarily disrupt our economic system.
According to the report of “The Effects of a Minimum-Wage increase on Employment and Family Income” from the Congressional Budget Office, increasing the minimum wage to as little as $10.10 would result in a loss of 500,000 jobs (Page 2). Small and medium size businesses will be forced to lay off employees since they will not be able to afford the new minimum wage increase. Moreover, in accordance with the report of the Office of the Controller from San Francisco “Increasing the Minimum Wage: Economic Impact Report”, a $15 increase would reduce the city’s overall employment in the private sector by 15,270 (Page 19). These instant and drastic decreases in employment will increase consumer pricing temporarily disrupting the consumer freedom principle in which our economy is founded on. And although low-income workers will temporarily see an increase in wages, their earned income will be affected by the decrease of hours and decrease of employment as explained by a study from the Federal Reserve
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